Bus Travel: Time to Booking: Is A New Player Emerging?

Redbus was one of India’s first companies to solve a real-world problem — one that afflicted not just the top 1% who were upwardly mobile, smartphone/ laptop users but also the masses that traveled by bus.

What many people don’t realize is that more than the front end booking engine they built, it was the back end that was truly proprietary and difficult to put together. Imagine training an entire industry that was used to point of sale/ counter based ticket sales to switch to an online platform.

Not a small task to accomplish, especially when you take into account that the decision makers they were dealing with were rough and tumble bus operators and not smooth talking hotel managers.

In fact, GoIbibo’s acquisition of RedBus has been one of the few truly value accretive transactions in venture that generated real returns for both investors and entrepreneurs. And now since GoIbibo is a part of MakeMyTrip, the combine of Red Bus, GoIbibo & MMT make for stunning monolith with the potential to profoundly influence sales and pricing of bus tickets in the country as more and more counters go digital. That is, of course, assuming they are able to retain a majority in the market and continue to power the back end.

I say this because it was quite a surprise to see Abhi Bus inching up the table in terms of Day of Departure bookings. It is second only to Go Ibibo; suggesting that AbhiBus is, in fact, living up to its name.

Why does this matter? Because ‘time to booking’ is a great indicator of dependence on a platform. That people feel confident buying a ticket on the day they plan to travel speaks volumes about their faith in the company’s ability to deliver. Think about it like this, earlier we used to book a taxi to go the airport a night before the actual date of departure. Now we just open an App and summon a cab a few minutes before we need to leave.

It’s worth asking if a similar shift taking place in Bus Travel? If so, what are the implications of this trend on pricing? Should platforms introduce an element of surge? More importantly, is Abhibus’ foray into providing the back end GDS to operators in the smaller town of India working out?

Here, their main investors — PayTM, can provide more than just money. For people in smaller Indian towns, online payments are a real struggle. This is also a constituency that PayTM wants to service in order to become India’s default payment platform; making for a great overlap in use cases and alignment of goals.

PayTM’s desire to get into travel (and almost everything else) is well-known. In order to ingratiate themselves in our lives, they need to be where we need to pay. Buses, therefore, provide one more channel to bring in the long tail.

Thanks for your time,

- Team KG

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You can reach me on ashish@kalagato.com

KalaGato is an automated audience profiling, segmentation and targeting platform that helps brands reach their customers.

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